About the Young Workers Centre

SUBMISSION BY THE YOUNG WORKERS CENTRE TO THE VICTORIAN INQUIRY INTO THE LABOUR HIRE INDUSTRY AND INSECURE WORK

CONTACT

Keelia Fitzpatrick

Coordinator, Young Workers Centre

E:

M: 0421 576 481

ABOUT THE YOUNG WORKERS CENTRE

The Young Workers Centre educates young workers about their safety and workplace rights, and empowers them to resolve issues in the workplace.

Based in Trades Hall, we educate young people as they enter the workforce via our training programs. These are available to all Victorian high schools, TAFEs and technical colleges. We assist young people to resolve workplace issues through our legal service designed exclusively for young workers. We empower young people to use their collective voice by driving campaigns on key issues for young people at work.

OUR VISION

A state in which young people are safe at work, do not suffer harassment or bullying, and are provided their legal entitlements. For this vision to be realised, we must encourage young people to speak up without fear and join with other young workers to make change and improve their workplaces and communities.

EXECUTIVE SUMMARY

The Young Workers Centre welcomes this opportunity to make a submission to the Inquiry into Labour Hire and Insecure Work. We are encouraged that the Victorian Government sees addressing the rise in insecure work as a priority, and look forward to working with the Victorian Government to take action to reverse this trend. With experts estimating 40% of Australians are in some form of insecure work[1], there is an urgent need to address the forms of employment and work that have caused this epidemic inequity.

The Young Workers Centre educates, represents and campaigns with working people under 30, and accordingly this submission addresses the growth of insecure work and its impact on young people. We draw on personal stories of insecure work young people have shared with us through an online submission tool for the purpose of this inquiry, anecdotal evidence young people have shared with us via our rights at work training program and other published longitudinal studies of young people. These personal stories, quoted throughout this submission, highlight the plight of vulnerable young workers who face growing financial insecurity and harm to their wellbeing as a result of insecure work.

Stories from young workers show insecurity comes in many forms. Some young people are required to become independent contractors instead of being employed directly, allowing employers to avoid paying employee entitlements such as superannuation, workers' compensation and leave[2]. Some work off-the-books in the black economy (commonly referred to as “cash in hand”) for below-award rates while missing out on entitlements such as penalty rates, superannuation and annual leave[3]. Some young people experience insecurity as they embark on their careers, such as graduate teachers who are faced with rolling contracts instead of permanent full time work[4]. Young migrant workers experience insecurity through systematic underpayments that affect entire industries, leaving them without alternative options[5].

These stories and experiences have a common thread: employers are shirking responsibilities to provide employment-related entitlements and protections by shifting the responsibility onto employees, or removing those entitlements and protections from the equation. These forms of work entrench and worsen the inherent imbalance in power between employer and employee and cut job security for working people.

Despite insecure work affecting people of all ages, young people make up a disproportionately high number of people in insecure employment. Young people are more vulnerable due to their inexperience in the workforce and lower levels of knowledge of their workplace rights and entitlements. When starting out in the workforce or early in their careers, they often have little choice but to take up whatever employment opportunities and conditions are offered. For example the hospitality and retail industries exist off the backs of young people working long, irregular, unsociable hours where casual contracts and working-off-the-books are normalised.

This submission addresses:

·  How employment arrangements such as casual, fixed-term contracts, independent contracting, labour hire and employment off-the-books are adversely affecting young people

·  The overrepresentation of young workers (including young Indigenous people) in insecure work

·  The impact insecure work has on young peoples’ studies, financial security, social relationships and general wellbeing

·  The systematic exploitation of young migrant workers including international students, those on working holidays and those working on 457 visas

·  The normalisation of unpaid work such as unpaid internships that has occurred alongside the normalisation of insecure work

·  The misconception in public conversation that young workers do not want or value job and financial security, a view that is put forward by employer groups and others

INSECURE WORK: WHAT DOES IT LOOK LIKE?

The Australian Council of Trade Unions report from the Independent Inquiry into Insecure Work Lives on Hold defines insecure work as poor quality work that provides people with little economic security and little control over their working lives.

Insecure work is most often associated with non-permanent forms of employment like casual work, fixed-term contracts, independent contracting and labour hire – all of which are growing[6]. The Young Workers Centre also considers working off-the-books and unpaid work (such as unpaid internships) as forms of insecure work.

THE EFFECTS OF INSECURE WORK

Young working people bear the brunt of increased labour market insecurity. One third of jobs created in Australia over the past 25 years are less secure, meaning they are temporary, part-time or force self-employment[7]. Industries and jobs that have been affected include:

·  Teaching; where two-thirds of new Victorian government school teachers in their first five years of teaching are on short-term contracts[8]

·  Retail; where the extension and fluctuation of retail trading hours across the week has led to the massive and normalised casualisation of the industry[9]

·  Hospitality; where a culture of working off-the-books has resulted in chronic underpayment of wages and a disregard for minimum legal standards such as paid breaks[10]

·  Distribution & warehousing; where temporary work through labour hire companies has become the only employment opportunity for many workers[11]

These examples illustrate practices where casual or contract work is used to replace rather than supplement ongoing workforces, where business structures are designed to offload responsibility for employment-related protections and entitlements on to employees, and where employers choose to flout laws by working outside them in the black economy.

Young people are more likely to be employed casually, work irregular hours and be without paid leave entitlements. Over half of 15-19 year olds and one-third of 20-24 year olds are employed in casual employment, in contrast with 18% of those aged 25 and older[12]. The same insecurity is reflected in the proportion of young people working irregular hours, with 7 in 10 working weekends, evening or night shift work[13]. Young people are also less likely to have access to paid leave entitlements. Only 28% of 15-19 year olds and 60% of 20-24 year olds receive paid leave entitlements, compared with 82% for the population aged 25 and over[14].

The spread of insecure work through industries means that too many young people now regard these irregular working conditions as normal. More people are forced to work without the security of regular, predictable hours and a regular, reliable pay. While we recognise there is a place for some casual or short term work, it is vital that insecure work is not normalised for a generation of young people. The impact of insecure work on students, graduates and young professionals, young working visa holders and young Indigenous people are examined below.

STUDENTS

Many young people are trying to balance their paid employment with study, with one longitudinal study showing 67% of young people aged 18-20 were mixing study with paid employment[15]. The effects of mixing study with variable hours in an already precarious labour market mean that many young people have little control over their schedules. The same study showed young people found it difficult to find regular periods of shared time to maintain close friendships and to build new acquaintances into deeper friendships.

GRADUATES AND YOUNG PROFESSIONALS

The transition from study to work is getting longer. Young people are finding it harder to access full-time work, even after graduating from higher education. Reports show it takes young people 4.7 years from leaving full-time education to entering full-time work (compared with around one year in 1986)[16]. For example, research has revealed two-thirds of new teachers in Victorian Government schools are on short-term contracts in their first five years, almost 10% more than the previous year. Only half saw themselves teaching for more than a decade, many citing job insecurity as the factor driving them out of the profession[17]. Insecure work can also have a significant impact on mental health. The stress, anxiety and depression caused by financial insecurity (or the threat of it) takes a huge toll on workers in short term or rolling contracts.

YOUNG MIGRANT WORKERS

In 2015 we have seen media attention focus on the rampant exploitation of young migrant workers in Australia by unscrupulous labour hire companies and through franchise structures that survive on the back of systematic underpayments to workers.

We have seen evidence of migrant worker exploitation by labour-hire companies in our fresh food picking and packing industry. Where young people on working holiday visas are subject to brutal working hours, degrading living conditions and the massive underpayment of wages[18]. We have seen evidence of the same story for 7-Eleven workers, where systematic underpayments result in their predominantly international student workforce being paid approximately half the award rate[19].

Exploitation of young migrant workers is rife: 80% of foreign language advertisements have been found to offer wages below legal rates. Many of them are openly advertised as "black jobs"[20]. Whistle-blowers say it’s common for migrant workers to be paid $12-$15 per hour, and in some cases as low as $8 per hour[21]. To stop this exploitation it is imperative that young migrant workers are fully informed of their rights and entitlements while working in Australia, and have the opportunity to speak to the relevant union in their industry.

YOUNG INDIGENOUS PEOPLE

Young Indigenous Australians are overrepresented in insecure work. Indigenous workers are more likely than non-Indigenous workers to be employed in ‘low status’ occupations and to be more insecurely attached to the labour force[22]. Insecure work also leaves many with fewer hours work than they need to get by. One longitudinal study showed 59% of young Indigenous people wanted to work more hours compared with 31.7% of non-Indigenous people[23]. The cycle of employment in ‘low status’ insecure jobs that do not provide enough hours of work to get by entrenches disadvantage for young Indigenous people.

UNPAID INTERNSHIPS

The widespread use of unpaid internships is an example of how new forms of insecure work impact people in the early stages of their working life. Studies and statistics on insecure work do not tend to include those who are working for no pay or less than minimum wage by completing unpaid internships. 86% of interns receive no pay or below minimum wage despite only 40% of internships being completed as part of education or training[24]. These exploited young people are not currently recognised or accounted for in discussions around insecure work. The rise in unpaid internships is a result of the same inherent imbalance in power between employers and employees that has seen insecure work arrangements spread so widely. Unpaid work, specifically unpaid internships, should therefore be acknowledged and addressed as a new form of insecure work for young people.

In order to reduce the spread of these unjust employer practices, the Victorian Government must provide young people with the tools they need to enter the workforce: workplace safety and rights training.

YOUNG PEOPLE SAY THEY WANT JOBS THEY CAN COUNT ON

For too long, public narrative around young people and work has been dominated by the notion that young people are happy to work irregular, unsociable hours. Some employer groups have argued that young people would be happy to take a pay cut for this irregular work through the removal of penalty rates they currently receive as compensation for working late nights and weekends[25].

However a longitudinal study of ‘Generation Y’ (generally defined as those born early 1980s to early 1990s) showed young people consistently and strongly valued secure work, with 60% of young people naming financial security as a top priority[26]. The same study showed that although young people have strongly valued full-time secure work, it has been harder to obtain. Compared with previous generations, young people are less optimistic that they will be able to access a secure well-paid job. Many young people are now finding themselves in a situation of ‘precarious’ employment – a combination of low pay, employment insecurity and working time insecurity[27].

Rather than accepting what employers think young people want out of work, we must listen to young people themselves. We must acknowledge young people when they say they want and value secure work. We must acknowledge the failings that have led a generation to lose optimism that they can access such work. It is unacceptable that the current generation of young people are unable to access secure work when they seek it.

CONCLUSION

As insecure work becomes increasingly common for young people, it becomes accepted. Irregular work schedules and irregular pay will become normalised. If left unaddressed, the generational impact of insecure work will be a state where people are less safe at work, suffer greater financial stress, have lower quality relationships with friends and family and ultimately have less capacity to plan their lives. Those unable to escape the cycle of insecure work will be left behind, contributing to widening inequality in our society. In light of this we make the following recommendations.